Self-Regulatory Organizations; International Securities Exchange, LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Extend a Pilot Program That Allows the Listing of Strike Prices at One-Point Intervals for Stocks Trading Under $20, 26854-26856 [E7-9070]

Download as PDF 26854 Federal Register / Vol. 72, No. 91 / Friday, May 11, 2007 / Notices in the Pilot Program Extension Notices.7 Amex notes that, as the data indicates, the $1 strikes exhibited higher volume and open interest than the ‘‘standard’’ strike price intervals. Specifically, the five options classes selected by Amex for $1 strikes had a trading volume of 327,115 contracts, while the ‘‘standard’’ strikes for the same options classes had a trading volume 290,191 contracts. Of even greater significance is the difference in open interest between the $1 strikes and ‘‘standard’’ strikes. As of April 30, 2007, $1 strikes open interest totaled 685,808 contracts versus 396,777 contracts for ‘‘standard’’ strikes. Given the limited nature of the Pilot Program, the Exchange submits that the impact on systems has been minimal. Accordingly, Amex believes that an extension of the Pilot Program for one year through June 5, 2008, is warranted. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with the Section 6(b) of the Act,8 in general, and furthers the objective of Section 6(b)(5) of the Act,9 in particular, in that it is designed to promote just and equitable principles of trade and to remove impediments to and perfect the mechanism of a free and open market. B. Self-Regulatory Organization’s Statement on Burden on Competition No written comments were solicited or received with respect to the proposed rule change. ycherry on PROD1PC64 with NOTICES III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing rule change does not: (1) Significantly affect the protection of investors or the public interest; (2) impose any significant burden on competition; and (3) become operative for 30 days from the date of this filing, or such shorter time as the Commission may designate, it has become effective pursuant to Section Pilot Program Extension Notices, supra note 8 15 U.S.C. 78f(b). 9 15 U.S.C. 78f(b)(5). VerDate Aug<31>2005 21:09 May 10, 2007 Jkt 211001 Electronic Comments • Use the Commission’s Internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an e-mail to rulecomments@sec.gov. Please include File No. SR–Amex–2007–43 on the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6). Rule 19b–4(f)(6) also requires the self-regulatory organization to give the Commission notice of its intent to file the proposed rule change, along with a brief description and text of the proposed rule change, at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. Amex has satisfied the five-day prefiling requirement. As set forth in the Commission’s initial approval of the Pilot Program, if Amex proposes to: (1) Extend the Pilot Program; (2) expand the number of options eligible for inclusion in the Pilot Program; or (3) seek permanent approval of the Pilot Program, it must submit a Pilot Program report to the Commission along with the filing of its proposal to extend, expand, or seek permanent approval of the Pilot Program. Amex must file any proposal to expand or seek permanent approval of the Pilot Program and the Pilot Program report with the Commission at least 60 days prior to the expiration of the Pilot Program. The Pilot Program report must cover the entire time the Pilot Program was in effect and must include: (1) Data and written analysis on the open interest and trading volume for options (at all strike price intervals) selected for the Pilot Program; (2) delisted options series (for all strike price intervals) for all options selected for the Pilot Program; (3) an assessment of the appropriateness of $1 strike price intervals for the options Amex selected for the Pilot Program; (4) an assessment of the impact of the Pilot Program on the capacity of Amex’s, the Options Price Reporting Authority’s, and vendors’ automated systems; (5) any capacity problems or other problems that arose during the operation of the Pilot Program and how Amex addressed them; (6) any complaints that Amex received during the operation of the Pilot Program and how Amex addressed them; and (7) any additional information that would help to assess the operation of the Pilot Program. See Pilot Approval Order, supra note 5. 11 17 C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others 7 See IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: 10 15 The Exchange believes that the proposed rule change will impose no burden on competition that is not necessary or appropriate in the furtherance of the purposes of the Act. 6. 19(b)(3)(A) of the Act10 and Rule 19b– 4(f)(6) thereunder.11 At any time within 60 days of the filing of the proposed rule change, the Commission may summarily abrogate such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. PO 00000 Frm 00083 Fmt 4703 Sfmt 4703 100 F Street, NE., Washington, DC 20549–1090. All submissions should refer to File No. SR–Amex–2007–43. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission’s Internet Web site (https://www.sec.gov/ rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission’s Public Reference Room. Copies of such filing will also be available for inspection and copying at the principal office of Amex. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File No. SR–Amex–2007–43 and should be submitted on or before June 1, 2007. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.12 Florence E. Harmon, Deputy Secretary. [FR Doc. E7–9076 Filed 5–10–07; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–55715; File No. SR–ISE– 2007–26] Self-Regulatory Organizations; International Securities Exchange, LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Extend a Pilot Program That Allows the Listing of Strike Prices at One-Point Intervals for Stocks Trading Under $20 May 7, 2007. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 12 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 E:\FR\FM\11MYN1.SGM 11MYN1 Federal Register / Vol. 72, No. 91 / Friday, May 11, 2007 / Notices notice is hereby given that on April 30, 2007, the International Securities Exchange, LLC (‘‘ISE’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I, II, and III below, which Items have been substantially prepared by ISE. The Exchange has filed the proposal as a ‘‘non-controversial’’ rule change pursuant to Section 19(b)(3)(A) of the Act 3 and Rule 19b–4(f)(6) thereunder,4 which renders it effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to extend until June 5, 2008, its $1 strike pilot program that allows the listing of strike prices at one-point intervals (‘‘Pilot Program’’). The text of the proposed rule change is available at ISE, the Commission’s Public Reference Room, and https://www.iseoptions.com. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, ISE included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. ISE has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose On June 16, 2003, the Commission approved ISE’s Pilot Program, which allows ISE to list series with $1 strike price intervals on equity option classes that overlie up to five individual stocks, provided that the strike prices are $20 or less, but not less than $3.5 The Pilot Program, after being extended on four prior occasions,6 is set to expire on June U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6). 5 See Securities Exchange Act Release No. 48033 (June 16, 2003), 68 FR 37036 (June 20, 2003) (SR– ISE–2003–17) (‘‘Pilot Program Approval Order’’). 6 See Securities Exchange Act Release Nos. 49827 (June 8, 2004), 69 FR 33966 (June 17, 2004) (SR– ISE–2004–21); 50060 (July 22, 2004), 69 FR 45864 (July 30, 2004) (SR–ISE–2004–26); 51769 (May 31, 5, 2007.7 The Exchange may currently select up to five individual stocks to be included in the Pilot Program. The Exchange, however, is also permitted to list options on other individual stocks at $1 strike price intervals if other options exchanges listed those series pursuant to their respective rules. The Exchange has selected the following five options classes to participate in the Pilot Program: AMR Corp. (AMR), Clapine Corp. (CPN), EMC Corp. (EMC), El Paso Corp. (EP), and Sun Microsystems Inc. (SUNW). ISE believes the Pilot Program has been successful and well received by its members and the investing public. Thus, ISE proposes to extend the Pilot Program until June 5, 2008. In support of this proposed rule change, and as required by the Pilot Program Approval Order and the Pilot Extension Notices, the Exchange is submitting to the Commission a report (‘‘Pilot Program Report’’), attached as Exhibit 3 to the proposal, detailing the Exchange’s experience with the Pilot Program. Specifically, the Pilot Program Report contains data and written analysis regarding the five options classes included in the Pilot Program for the period between March 2006 through February 2007. The Exchange believes there is sufficient investor interest and demand to extend the Pilot Program for another year. The Exchange continues to believe that the Pilot Program has provided investors with greater trading opportunities and flexibility and the ability to more closely tailor their investment strategies and decisions to the movement of the underlying security. Furthermore, the Exchange has not detected any material proliferation of illiquid options series resulting from the narrower strike price intervals. 2. Statutory Basis The Exchange believes the proposed rule change is consistent with the Act and the rules and regulations thereunder and, in particular, the requirements of Section 6(b) of the Act.8 Specifically, the Exchange believes the proposed rule change is consistent with the requirements under Section 6(b)(5) of the Act 9 that the rules of a national securities exchange be designed to promote just and equitable principles of trade, to prevent fraudulent and manipulative acts, to remove 3 15 ycherry on PROD1PC64 with NOTICES 4 17 VerDate Aug<31>2005 21:09 May 10, 2007 Jkt 211001 2005), 70 FR 33232 (June 07, 2005) (SR–ISE–2005– 22); and 53806 (May 15, 2006), 71 FR 29694 (May 23, 2006) (SR–ISE–2006–20) (collectively, ‘‘Pilot Extension Notices’’). 7 See Securities Exchange Act Release No. 53806, supra note 6. 8 15 U.S.C. 78f(b). 9 15 U.S.C. 78f(b)(5). PO 00000 Frm 00084 Fmt 4703 Sfmt 4703 26855 impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest. The Exchange believes that extension of the Pilot Program will result in a continuing benefit to investors by allowing them to more closely tailor their investment decisions, and will allow the Exchange to further study investor interest in $1 strike price intervals. B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange believes that the proposed rule change does not impose any burden on competition that is not necessary or appropriate in the furtherance of the purposes of the Act. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others The Exchange has not solicited, and does not intend to solicit, comments on this proposed rule change. The Exchange has not received any unsolicited written comments from members or other interested persons. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing rule change does not: (1) Significantly affect the protection of investors or the public interest; (2) impose any significant burden on competition; and (3) become operative for 30 days from the date of this filing, or such shorter time as the Commission may designate, it has become effective pursuant to Section 19(b)(3)(A) of the Act 10 and Rule 19b– 4(f)(6) thereunder.11 10 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6). Rule 19b–4(f)(6) also requires the self-regulatory organization to give the Commission notice of its intent to file the proposed rule change, along with a brief description and text of the proposed rule change, at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. ISE has satisfied the five-day prefiling requirement. As set forth in the Commission’s initial approval of the Pilot Program, if ISE proposes to: (1) Extend the Pilot Program; (2) expand the number of options eligible for inclusion in the Pilot Program; or (3) seek permanent approval of the Pilot Program, it must submit a Pilot Program report to the Commission along with the filing of its proposal to extend, expand, or seek permanent approval of the Pilot Program. ISE must file any proposal to expand or seek permanent approval of the Pilot Program and the Pilot Program report with the Commission at least 60 days prior to the expiration of the Pilot Program. The Pilot Program report must cover the entire time the Pilot Program was in effect and must include: (1) Data and written analysis on the open interest and trading volume for options (at all strike price intervals) selected for the Pilot 11 17 E:\FR\FM\11MYN1.SGM Continued 11MYN1 26856 Federal Register / Vol. 72, No. 91 / Friday, May 11, 2007 / Notices At any time within 60 days of the filing of the proposed rule change, the Commission may summarily abrogate such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission’s Internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an e-mail to rulecomments@sec.gov. Please include File No. SR–ISE–2007–26 on the subject line. ycherry on PROD1PC64 with NOTICES Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549–1090. All submissions should refer to File No. SR–ISE–2007–26. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission’s Internet Web site (https://www.sec.gov/ rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be Program; (2) delisted options series (for all strike price intervals) for all options selected for the Pilot Program; (3) an assessment of the appropriateness of $1 strike price intervals for the options ISE selected for the Pilot Program; (4) an assessment of the impact of the Pilot Program on the capacity of ISE’s, the Options Price Reporting Authority’s, and vendors’ automated systems; (5) any capacity problems or other problems that arose during the operation of the Pilot Program and how ISE addressed them; (6) any complaints that ISE received during the operation of the Pilot Program and how ISE addressed them; and (7) any additional information that would help to assess the operation of the Pilot Program. See Pilot Program Approval Order, supra note 5. VerDate Aug<31>2005 21:09 May 10, 2007 Jkt 211001 available for inspection and copying in the Commission’s Public Reference Room. Copies of such filing will also be available for inspection and copying at the principal office of ISE. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File No. SR–ISE–2007–26 and should be submitted on or before June 1, 2007. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.12 Florence E. Harmon, Deputy Secretary. [FR Doc. E7–9070 Filed 5–10–07; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–55717; File No. SR–NASD– 2007–029] Self-Regulatory Organizations: National Association of Securities Dealers, Inc.; Notice of Filing of Proposed Rule Change Relating to Access Fee Display Requirements for the OTCBB May 7, 2007. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 notice is hereby given that on April 20, 2007, the National Association of Securities Dealers, Inc. (‘‘NASD’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I, II, and III below, which Items have been substantially prepared by NASD. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change NASD is proposing to amend NASD Rule 6540(c) to exclude from the access fee display requirements access fees below a specified level. Below is the text of the proposed rule change. Proposed new language is in italics; proposed deletions are in brackets. * * * * * 12 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 PO 00000 Frm 00085 Fmt 4703 Sfmt 4703 6540. Requirements Applicable to Market Makers (a) through (b) No Change. (c) A participating ATS or ECN shall reflect non-subscriber access or posttransaction fees in its published quotation [the ATS’s or ECN’s posted quoted] in the OTC Bulletin Board montage if: (1) The published quotation is priced equal to or greater than $1.00 and such fees exceed or accumulate to more than $0.003 per share; or (2) The published quotation is less than $1.00 and such fees exceed or accumulate to more than 0.3% of the published quotation price on a per share basis. (d) through (e) No Change. * * * * * II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, NASD included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. NASD has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose NASD Rule 6540(c) requires an alternative trading system (‘‘ATS’’) 3 or electronic communications network (‘‘ECN’’) 4 to reflect non-subscriber access or post-transaction fees in its posted quotation in the OTC Bulletin Board (‘‘OTCBB’’). NASD established the requirements in Rule 6540(c) to permit ATSs and ECNs to participate in the OTCBB in the same way that market makers participate.5 Specifically, because a market maker does not charge access or post-transaction fees over and above its posted quotation, a participating ATS or ECN is prohibited from charging such fees, unless such fees are incorporated in the ATS’s or ECN’s posted quotation. Concerns have 3 See Rule 300(a) of Regulation ATS under the Act (defining ‘‘alternative trading system’’). 4 See Rule 600(b)(23) of Regulation NMS under the Act (defining ‘‘electronic communication network’’). 5 See Securities Exchange Act Release No. 45915 (May 10, 2002), 67 FR 35171 (May 17, 2002) (approving SR–NASD–2001–44). E:\FR\FM\11MYN1.SGM 11MYN1

Agencies

[Federal Register Volume 72, Number 91 (Friday, May 11, 2007)]
[Notices]
[Pages 26854-26856]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-9070]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-55715; File No. SR-ISE-2007-26]


Self-Regulatory Organizations; International Securities Exchange, 
LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule 
Change To Extend a Pilot Program That Allows the Listing of Strike 
Prices at One-Point Intervals for Stocks Trading Under $20

May 7, 2007.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'') \1\ and Rule 19b-4 thereunder,\2\

[[Page 26855]]

notice is hereby given that on April 30, 2007, the International 
Securities Exchange, LLC (``ISE'' or ``Exchange'') filed with the 
Securities and Exchange Commission (``Commission'') the proposed rule 
change as described in Items I, II, and III below, which Items have 
been substantially prepared by ISE. The Exchange has filed the proposal 
as a ``non-controversial'' rule change pursuant to Section 19(b)(3)(A) 
of the Act \3\ and Rule 19b-4(f)(6) thereunder,\4\ which renders it 
effective upon filing with the Commission. The Commission is publishing 
this notice to solicit comments on the proposed rule change from 
interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A).
    \4\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to extend until June 5, 2008, its $1 strike 
pilot program that allows the listing of strike prices at one-point 
intervals (``Pilot Program''). The text of the proposed rule change is 
available at ISE, the Commission's Public Reference Room, and https://
www.iseoptions.com.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, ISE included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. ISE has prepared summaries, set forth in Sections A, B, 
and C below, of the most significant aspects of such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    On June 16, 2003, the Commission approved ISE's Pilot Program, 
which allows ISE to list series with $1 strike price intervals on 
equity option classes that overlie up to five individual stocks, 
provided that the strike prices are $20 or less, but not less than 
$3.\5\ The Pilot Program, after being extended on four prior 
occasions,\6\ is set to expire on June 5, 2007.\7\ The Exchange may 
currently select up to five individual stocks to be included in the 
Pilot Program. The Exchange, however, is also permitted to list options 
on other individual stocks at $1 strike price intervals if other 
options exchanges listed those series pursuant to their respective 
rules. The Exchange has selected the following five options classes to 
participate in the Pilot Program: AMR Corp. (AMR), Clapine Corp. (CPN), 
EMC Corp. (EMC), El Paso Corp. (EP), and Sun Microsystems Inc. (SUNW). 
ISE believes the Pilot Program has been successful and well received by 
its members and the investing public. Thus, ISE proposes to extend the 
Pilot Program until June 5, 2008.
---------------------------------------------------------------------------

    \5\ See Securities Exchange Act Release No. 48033 (June 16, 
2003), 68 FR 37036 (June 20, 2003) (SR-ISE-2003-17) (``Pilot Program 
Approval Order'').
    \6\ See Securities Exchange Act Release Nos. 49827 (June 8, 
2004), 69 FR 33966 (June 17, 2004) (SR-ISE-2004-21); 50060 (July 22, 
2004), 69 FR 45864 (July 30, 2004) (SR-ISE-2004-26); 51769 (May 31, 
2005), 70 FR 33232 (June 07, 2005) (SR-ISE-2005-22); and 53806 (May 
15, 2006), 71 FR 29694 (May 23, 2006) (SR-ISE-2006-20) 
(collectively, ``Pilot Extension Notices'').
    \7\ See Securities Exchange Act Release No. 53806, supra note 6.
---------------------------------------------------------------------------

    In support of this proposed rule change, and as required by the 
Pilot Program Approval Order and the Pilot Extension Notices, the 
Exchange is submitting to the Commission a report (``Pilot Program 
Report''), attached as Exhibit 3 to the proposal, detailing the 
Exchange's experience with the Pilot Program. Specifically, the Pilot 
Program Report contains data and written analysis regarding the five 
options classes included in the Pilot Program for the period between 
March 2006 through February 2007.
    The Exchange believes there is sufficient investor interest and 
demand to extend the Pilot Program for another year. The Exchange 
continues to believe that the Pilot Program has provided investors with 
greater trading opportunities and flexibility and the ability to more 
closely tailor their investment strategies and decisions to the 
movement of the underlying security. Furthermore, the Exchange has not 
detected any material proliferation of illiquid options series 
resulting from the narrower strike price intervals.
2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
the Act and the rules and regulations thereunder and, in particular, 
the requirements of Section 6(b) of the Act.\8\ Specifically, the 
Exchange believes the proposed rule change is consistent with the 
requirements under Section 6(b)(5) of the Act \9\ that the rules of a 
national securities exchange be designed to promote just and equitable 
principles of trade, to prevent fraudulent and manipulative acts, to 
remove impediments to and perfect the mechanism of a free and open 
market and a national market system, and, in general, to protect 
investors and the public interest. The Exchange believes that extension 
of the Pilot Program will result in a continuing benefit to investors 
by allowing them to more closely tailor their investment decisions, and 
will allow the Exchange to further study investor interest in $1 strike 
price intervals.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange believes that the proposed rule change does not impose 
any burden on competition that is not necessary or appropriate in the 
furtherance of the purposes of the Act.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    The Exchange has not solicited, and does not intend to solicit, 
comments on this proposed rule change. The Exchange has not received 
any unsolicited written comments from members or other interested 
persons.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Because the foregoing rule change does not: (1) Significantly 
affect the protection of investors or the public interest; (2) impose 
any significant burden on competition; and (3) become operative for 30 
days from the date of this filing, or such shorter time as the 
Commission may designate, it has become effective pursuant to Section 
19(b)(3)(A) of the Act \10\ and Rule 19b-4(f)(6) thereunder.\11\
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 17 CFR 240.19b-4(f)(6). Rule 19b-4(f)(6) also requires the 
self-regulatory organization to give the Commission notice of its 
intent to file the proposed rule change, along with a brief 
description and text of the proposed rule change, at least five 
business days prior to the date of filing of the proposed rule 
change, or such shorter time as designated by the Commission. ISE 
has satisfied the five-day pre-filing requirement. As set forth in 
the Commission's initial approval of the Pilot Program, if ISE 
proposes to: (1) Extend the Pilot Program; (2) expand the number of 
options eligible for inclusion in the Pilot Program; or (3) seek 
permanent approval of the Pilot Program, it must submit a Pilot 
Program report to the Commission along with the filing of its 
proposal to extend, expand, or seek permanent approval of the Pilot 
Program. ISE must file any proposal to expand or seek permanent 
approval of the Pilot Program and the Pilot Program report with the 
Commission at least 60 days prior to the expiration of the Pilot 
Program. The Pilot Program report must cover the entire time the 
Pilot Program was in effect and must include: (1) Data and written 
analysis on the open interest and trading volume for options (at all 
strike price intervals) selected for the Pilot Program; (2) delisted 
options series (for all strike price intervals) for all options 
selected for the Pilot Program; (3) an assessment of the 
appropriateness of $1 strike price intervals for the options ISE 
selected for the Pilot Program; (4) an assessment of the impact of 
the Pilot Program on the capacity of ISE's, the Options Price 
Reporting Authority's, and vendors' automated systems; (5) any 
capacity problems or other problems that arose during the operation 
of the Pilot Program and how ISE addressed them; (6) any complaints 
that ISE received during the operation of the Pilot Program and how 
ISE addressed them; and (7) any additional information that would 
help to assess the operation of the Pilot Program. See Pilot Program 
Approval Order, supra note 5.

---------------------------------------------------------------------------

[[Page 26856]]

    At any time within 60 days of the filing of the proposed rule 
change, the Commission may summarily abrogate such rule change if it 
appears to the Commission that such action is necessary or appropriate 
in the public interest, for the protection of investors, or otherwise 
in furtherance of the purposes of the Act.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (https://
www.sec.gov/rules/sro.shtml); or
     Send an e-mail to rule-comments@sec.gov. Please include 
File No. SR-ISE-2007-26 on the subject line.

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris, 
Secretary, Securities and Exchange Commission, 100 F Street, NE., 
Washington, DC 20549-1090.

All submissions should refer to File No. SR-ISE-2007-26. This file 
number should be included on the subject line if e-mail is used. To 
help the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's Internet Web site (https://www.sec.gov/rules/
sro.shtml). Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule change that are 
filed with the Commission, and all written communications relating to 
the proposed rule change between the Commission and any person, other 
than those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for inspection and 
copying in the Commission's Public Reference Room. Copies of such 
filing will also be available for inspection and copying at the 
principal office of ISE. All comments received will be posted without 
change; the Commission does not edit personal identifying information 
from submissions. You should submit only information that you wish to 
make available publicly. All submissions should refer to File No. SR-
ISE-2007-26 and should be submitted on or before June 1, 2007.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E7-9070 Filed 5-10-07; 8:45 am]
BILLING CODE 8010-01-P
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